Microsoft Taps Legal Czar Amid EU, OOXML Woes

Microsoft (NASDAQ: MSFT) announced Monday it has hired a former European
diplomat to lead its dealings with the European Union (EU). The company's aim
is to help the company face down legal and regulatory threats, among which
are investigations regarding its controversial document interchange
formats.

Meanwhile, a fourth nation has appealed the recent ratification of those
formats as an International Organization for Standardization (ISO)
standard.

Slated to start July 1, former General Electric executive John Vassallo
will be Microsoft's vice president of EU affairs as well as associate general
counsel. At GE, he was senior counsel and director of European affairs. He
has also previously served as Malta's ambassador to the EU, NATO and
Belgium.

Vassallo's hiring comes at a time when Microsoft has been only partially
successful in putting its legal woes behind it, particularly in the EU.

"The creation of this role reflects the increasing importance of
Microsoft's engagement with the European Union across a wide range of policy
areas," the company said in a statement announcing Vassallo's
appointment.

One of the areas he will have purview over is Microsoft's continuing
contretemps with the European Commission (EC), the EU's executive branch,
which has levied the largest fines in EU history against the company for
abusing its market dominance.

The company is currently under investigation for possible improper
business practices during the recent ISO standards effort.

Meanwhile, the vocal debate between supporters and detractors of granting
Microsoft's Open Office XML (OOXML) formats worldwide standards status
cranked up another notch.

Last week, just as time ran out for nations involved in the ISO's OOXML
process to file appeals, three countries did just that -- South Africa,
Brazil and India. That was followed over the weekend by a fourth appeal, this
one from Venezuela's standards body, according to published reports.

That puts OOXML -- now renamed IS29500 -- in limbo until the appeals are
sorted out. Until then, OOXML is not officially a standard.

All of this is a familiar world for John Vassallo.

Still, whether bringing in a European legal heavy hitter and diplomat to
manage Microsoft's EU corporate and regulatory affairs unit will change the
company's fortunes in the face of a steady stream of attacks by the EC
remains to be seen.

However, it's certain that Vassallo will have his hands full from the
get-go.

Despite the fact that Microsoft settled its long-running antitrust case
with the EC last fall, the ripple effect of the landmark court ruling that
forced Microsoft to pay record EC fines
is still reverberating through the EC's legal channels.

For instance, the EC announced
in February that it is investigating whether OOXML is "sufficiently
interoperable with competitors' products" to put those companies on equal
footing with Microsoft.

In addition, the EC is investigating whether Microsoft should be forced to
unbundled Internet Explorer from Windows in EU markets.

The company has been steadfastly trying to rid itself of the distraction
and burden of litigation on all fronts since last
year. The EU has been a particularly distracting set of markets.

However, the company drew the line in May when it
appealed an additional $1.35 billion fine ordered by the EC for dragging its
feet in providing interoperability information to competitors in the
workgroup server market.

Meanwhile, the EC has said it is also looking into whether any of
Microsoft's rumored strong-arm tactics in pushing OOXML through the ISO "fast
track" standards process violated EU laws and regulations.